Exam 1 Review

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Click to edit Master subtitle style 4/9/11 Exam 1 Review Dean Flanders
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4/9/11 Economic Behavior People use marginal analysis when making decisions Everything is assigned a benefit/cost. If the benefits outweigh the costs, people usually go forward with the decision. People don’t care only about their own personal consumption, but they do make decisions based on what will bring them the greatest satisfaction
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4/9/11 Alternative Models Happy is productive Promote employee satisfaction Good citizen Communicate, facilitate, and praise Product of environment Hire the right people Only-Money-Matters Model Increase salary
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4/9/11 Opportunity Cost The opportunity costs of using a resource for a given purpose is the value (net benefit) of its best alternative use. Net benefit is the difference in value between the benefit received from an activity and the cost of that activity. The opportunity cost (value of your foregone alternative) must be compared to the benefit you receive from a certain activity
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4/9/11 Opportunity Cost You have won a free ticket to see an Eric Clapton concert (which has no resale value). Bob Dylan is performing on the same night and is your next best alternative activity. Tickets to see Dylan cost $40. On any given day, you would be willing to pay up to $50 to see Dylan. Assume there are no other costs of seeing either performer. Based on this information, what is the opportunity cost of seeing Eric Clapton? (a) $0 (b) $10 (c) $40 (d) $50.
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4/9/11 Demand Functions and Demand Curves Demand Function A mathematical representation of the relation between the quantity demanded of a product and all factors that influence this demand We focus on three particularly important variables which are the price of the product, the prices of related products, and the incomes of potential customers Demand Curve Displays for a particular period of time how many units
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This note was uploaded on 04/08/2011 for the course MANEC 300 taught by Professor Crawford,r during the Spring '08 term at BYU.

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Exam 1 Review - Exam1Review ClicktoeditMastersubtitlestyle...

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